I think the amount of gold you accumulate should be how many experience points you have. And when you reach milestones you're allowed to level up.
But any money you spend keeps you further away from your next level milestone. So you can save your gold to get to your next level or spend portions of it on things like magic weapons that will be useful in combat.
That's how it used to work a long time ago, back in the days of Advanced Dungeons and Dragons. Good times.
Although I'm not necessarily opposed to that idea on principle (I like gold as xp better than milestone, at least)...BG III really isn't set up in a way conducive to that sort of progression system. Like right now there really isn't any way to 'grind' levels-no random encounters basically. kill enemies. complete quests. But assigning xp to every tankard and wooden spoon wood make the process of leveling up very tedious IMO, and the 'scrounging for junk' thing even worse since it would become mandatory in a very unpleasant way.
